Will blockchain technology and smart contracts eliminate jobs?

Baozou Comment : Currently, blockchain technology is mainly used in the banking and financial fields to solve the process problems that require a lot of time and repetitiveness in these fields. Smart contracts based on blockchain technology can automate processes in various industries, which means that the corresponding positions will also be reduced. However, research shows that any automated process cannot replace the operation process that needs to face consumers. On the contrary, improving the level of automation in various fields can increase jobs, because someone is needed to monitor and maintain such a system. What employees in the financial field need to do is to keep up with the times and constantly update their skills.

Translation: Nicole

The underlying technology of Bitcoin, blockchain, has evolved from a ledger that records all transactions on the network to a technology widely adopted by all walks of life. Smart contracts based on blockchain technology can automate processes in all walks of life.

Currently, blockchain technology is mainly used in the banking and financial sectors to solve the time-consuming and repetitive process problems in these fields. When predetermined conditions are met, pre-written smart contracts will automatically execute certain processes, thus saving a lot of time and manpower. Automation can save these institutions a lot of money, but there are also many concerns about the impact of automation. Some people worry that the application of smart contracts in the financial sector will reduce the number of jobs.

Smart contracts and industry robots

The impact of increasing automation of processes in banking and finance is comparable to that in manufacturing. Studies have shown that so far, increasing automation has had little impact on jobs and opportunities in the industry. However, a study of the impact of robots on jobs in industry in 17 countries from 1993 to 2007 showed that overall wages rose slightly as automation increased.

According to the report, software robots and the company's back-end system interaction costs the company at least $2.7 per hour. But unlike people assigned to do the same job, these software robots can work day and night, processing large amounts of data. According to another report by Tata Consultancy Services, maintaining a company's financial system using automated systems can increase productivity by 90% and ensure that its accuracy is 100%. The same report shows that automating the verification and claims process in the insurance field can save 80% of transaction processing time.

A recent article in Finance magazine suggests that any form of automation, whether it is automated processes implemented by software programs or smart contracts that self-execute trade settlements and other financial operations, cannot replace processes that require consumer-facing operations. Similarly, increasing automation in various fields can increase jobs because people are needed to monitor and maintain such systems.

By comparing automation using industry robots and software programs with smart contracts, we can conclude that the impact of blockchain technology on jobs is not obvious. However, job requirements will change significantly in the future. If current employees in the financial field want to retain their original employment status when changes occur, they must keep pace with the changes in technology and constantly update their personal skills.